It’s a moderate start to the week as the US market swings higher on gains in industrial shares and the dollar strengthened causing gold to take a slide - it's biggest since September.
A quieter trading day on Monday as the stock market indexes made gains propelled by telecom, financial and technology stocks. Trading volumes are likely to gradually thin out this week, in the run-up to Thanksgiving Day on Thursday. Corporate earnings still remain an impetus as investors assess the likelihood that no action will be taken on a US tax overhaul until after the holiday. However, Lukman Otunuga, research analyst at FXTM, said in a note: "With uncertainty over US tax reforms and political risk in Europe eroding appetite for riskier assets, Wall Street could come under further selling pressure."
The Dow added +0.31% at 22,430.33, NASDAQ edged up +0.12% to close at 6,790.71 and the S&P 500 went up +0.13% to 2,582.14. Verizon led the gainers up +1.72% after Wells Fargo note promoted it "as an attractive yield play". It lifted the telecoms sector up +0.96%. Technology also got a boost on the Marvell Technology Group deal to buy Cavium, which jumped +11%, for $6bn. Merck & Co led the decliners falling -1.99%. Microsoft also added gains up +0.2%.
- Dow 22,430.33 +0.31%
- S&P 500 2,582.14 +0.13%
- NASDAQ 6,790.71 +0.12%
- Russell 2000 1,503.40 +0.71%
- NYSE Composite 12,320.77 +0.15%
- Gold 1,276.8 -1.52%
- Oil WTI $56.23 -0.57% (4:41PMEST)
- 10-Year Treasury 2.369 -0.22%
Corporate earnings still drives
Robert Doll, chief equity strategist at Nuveen Asset Management LLC, in his weekly outlook said, "Market sentiment has grown less positive in recent weeks, with investors more concerned about tax policy, fuller valuations and a sense of complacency.
He added, "From a fundamental perspective, investors are also becoming worried about the flattening yield curve and high yield market weakness, which tend to be bearish signals for equities. But we think the two most important drivers of equity markets - corporate earnings and real growth levels - still support a risk-on investment stance."
The dollar strengthens
The ICE US Dollar index was up 0.5% helping to push gold to its lowest in two months down -1.52% to $1,276 per ounce.
The Conference Board Leading Economic Index showed a jump of 1.2% in October, suggesting US economy is zooming along with the end of the year fast approaching.
The euro fell toward the $1.17 level early Monday after German governmental coalition talks broke down on Sunday, keeping the country's government in limbo and casting doubt over Chancellor Angela Merkel's future as leader.